Fed's Barr says his focus is on how long to hold rates high

📆 10/2/2023 8:09 PM
📰 YahooFinanceCA

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'In my view, the most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals,' Barr said in remarks prepared for delivery to the Forecasters Club of New York. The Fed last month opted to leave its benchmark policy rate unchanged in the 5.25%-5.5% range, but most policymakers were penciling in another interest rate hike before year's end and fewer rate cuts next year than they had earlier envisioned. Barr said his assessment of appropriate policy will take account of a range of incoming data, including 'the cost and availability of credit to the economy.'

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The Fed last month opted to leave its benchmark policy rate unchanged in the 5.25%-5.5% range, but most policymakers were penciling in another interest rate hike before year's end and fewer rate cuts next year than they had earlier envisioned. The labor market is "tight" he said - unemployment was 3.8% in August - but the supply and demand of workers has come into better balance, and he is more confident than he had been that the Fed can bring inflation down without a sharp rise in job losses.

He added that he feels the full effects of the Fed's policy tightening to date - which include 5.25 percentage points of rate hikes over the last 18 months, and an ongoing shrinking of its balance sheet - "are yet to come in the months ahead."A Ukrainian soldier called up Russian tech support when his captured Russian tank wouldn't start: report

Video appears to show a Russian tank hitting a mine and running out of control before sinking into water

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Fed's Bowman: Expects it to be appropriate to raise rates furtherBowman, in prepared remarks to a banking conference, said inflation remains too high and expects progress in lowering it to be slow 'given the current level of monetary policy restraint.' 'I remain willing to support raising the federal funds rate at a future meeting if the incoming data indicates that progress on inflation has stalled or is too slow to bring inflation to 2% in a timely way,' Bowman said. Energy prices also pose a renewed risk to inflation, she said, noting that the latest measure published on Friday of the Fed's preferred inflation gauge - the personal consumption expenditures price index (PCE) for August - showed that overall inflation rose, in part due to higher oil prices.
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